Energy produced at RWS to be sold to Duke Energy

RWS board votes to accept new energy contract

PORTLAND, Maine (Oct. 26) - The board of Regional Waste Systems (RWS) voted 20-0 Wednesday night to accept a new, two-year contract to sell electricity produced by its Portland waste-to-energy plant to Duke Energy Trading and Marketing, L.L.C.

Under the two-year power sales agreement, Duke Energy Trading and Marketing will buy 11 megawatts of electricity, 24 hours a day, 365 days a year from RWS. Electricity prices will range between 2.15 cents per kilowatt hour during off peak hours and 9.25 cents per kilowatt hour in the on peak hours. The contract begins on January 1, 2001. The contract means RWS will have a buyer for the energy produced by the incineration process at its plant, which is owned and governed by 21 cities and towns in Southern Maine.

"We're very comfortable with this agreement," said RWS General Manager Charles Foshay. "After all, we're now in what is a very new energy market in New England with deregulation and termination of our CMP contract, so we're pleased we've entered into an agreement with a large, experienced national company like Duke Energy, known as a leader in the industry."

The contract under which RWS previously sold its power to Central Maine expires at the end of this year. The Duke Energy contract ensures RWS a buyer for its energy throughout the transition to a competitive market.

The contract with Duke Energy is unique in that its performance-based rather than liquidated damages based, meaning RWS will be paid for the power they make, and avoid the risks of liquidated damages for the power they don't make. This is an important part of the contract for RWS, a municipal organization.

"It's a very good contract and Duke Energy is a great company to work with," said Dale Olmstead, chair of the 28-member board of RWS and Town Manager of Freeport.

"This agreement is a good one under current market circumstances. As a municipal organization that depends on tipping fees and revenues we get for the power we produce in the incineration process, it makes it especially challenging to budget, plan and evaluate our future when energy rates are predicted to be lower over time," Foshay added. "But that's what deregulation is supposed to do. However, it's doubtful the reduction in price in electricity will offset the financial impact those reductions will have on RWS. And that's one of the issues that the administration and the finance committee continue to work on here at RWS."

Regional Waste Systems, Inc. was established in 1974 after Portland, South Portland, Cape Elizabeth and Scarborough decided to form a cooperative to handle their waste disposal. Throughout the 1970s and 80s, more southern Maine towns joined the cooperative, and in the mid-80s member towns voted to build a waste-to-energy facility to burn trash from each member community and convert it to energy. In 1988, the European-designed mass burn incinerator went on-line at the new RWS facility located off outer Congress Street. A comprehensive recycling program also was initiated to reduce the amount of trash coming into the facility.

Today, RWS is the largest municipal recycling organization in the state. A total of 21 cities and towns own and control RWS, and six additional towns are associate members. The organization is governed by a 28-member board, consisting of officials appointed from member towns. RWS accepts solid waste and recycled materials from these communities with more than 100 recycling bins in more than 60 locations. For additional information on RWS, visit the RWS web site at: www.regionalwaste.com.

Duke Energy, a diversified multinational energy company, creates value for customers and shareholders through an integrated network of energy assets and expertise. Duke Energy manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses-- generating revenues of nearly $22 billion in 1999. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 100 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.

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